Ronen Zvulun/Pool Photo via AP
Israeli Prime Minister Benjamin Netanyahu attends the weekly cabinet meeting in Jerusalem Sunday, Sept. 10, 2017.
This decision follows a reconciliation deal signed last week by rival Palestinian factions Fatah and Hamas, the latest effort to bring the groups together after a decade-long split.
Hamas is considered a terrorist organization by Israel and the US, which has complicated efforts by the Palestinians to bring the groups together.
Notably, last week's deal failed to address arguably the biggest elephant in the room - what to do about Hamas' military wing.
In Tuesday's statement, Israel made it clear that any Palestinian government that emerges from the deal would need to adhere to previously announced guidelines, including that Hamas disarm, recognize Israel, and cut off ties with Iran.
Israeli Prime Minister Benjamin Netanyahu said Monday that Israel would not recognize the reconciliation agreement, but would also not break off relations with the Palestinian Authority, lead by President Mahmoud Abbas.
Before the most recent round of talks began, Abbas said he would not accept "the reproduction of the Hezbollah experience in Lebanon." Hezbollah, a recognized terrorist group, is part of the Lebanese government but maintains its own army.
Hamas has remained staunchly opposed to even discussing demilitarization, and in the past has called their military wing the "arms of the resistance" and argued "the resistance's weapons are legal."
"It is difficult to imagine Hamas giving up its weapons for the sake of reconciliation," Tariq Dana, policy adviser at Al-Shabaka: The Palestinian Policy Network, told Al Jazeera earlier this month.
"If Hamas lays down its weapons, it will no longer exist as a liberation movement, and therefore it will lose the popularity and legitimacy that lie at the core of its power," Dana said.
Hamas' military wing, known as the al-Qassam Brigades, comprises an estimated 25,000 troops, according to The New York Times.